The rate of inflation in Spain fell 0.3 percent to stand at 1.8 percent in July, according to the Consumer Price Index (CPI) published by the Spanish National Institute of Statistics (INE) on Tuesday. Prices of medicines, transport and housing had been the most affected in July\'s rate. Medicines were dearer by 3.7 percent, \"almost 10 points less than in June\" said the INE, while housing prices experienced another fall of 0.7 percent. Meanwhile, transport costs were reduced by 1.7 percent because of lower prices in electricity and fuel, respectively. INE said prices of food and non-alcoholic drinks increased by 4.4 percent in July, 0.7 percent up on the 2012 figure, while prices of alcoholic drinks and tobacco increased almost two points as a result of tax increases on these items in June. Spain\'s annual inflation rate stood at 2.1 percent in June with experts expecting a slight fall in the following months.